Question 1

If the price of battery-powered flashlights falls and the demand for flashlight batteries rises,then flashlights and batteries are:

Accepted Answer

A)  Substitutes. 
B)  Complements. 
C)  Price inelastic goods. 
D)  Price elastic goods. 
A)  Substitutes. 
B)  Complements. 
C)  Price inelastic goods. 
D)  Price elastic goods. B

Question 2

Table 4.1 - Utility schedule
Complete the table and then use the information to answer the question(s)below.  
-In Table 4.1,the total utility when two units are consumed is:

Accepted Answer

A)  12. 
B)  20. 
C)  30. 
D)  44. 
A)  12. 
B)  20. 
C)  30. 
D)  44. D

Question 3

Status and ego concerns are sociopsychiatric explanations for consumption behavior.

Accepted Answer

A) True 
 B)False  True

Question 4

Ceteris paribus,a price increase will cause total revenue to stay the same for a producer only if the price elasticity demand for its product is:

Accepted Answer

A)  Inelastic. 
B)  Elastic. 
C)  Unitary elastic. 
D)  Extremely high. 
A)  Inelastic. 
B)  Elastic. 
C)  Unitary elastic. 
D)  Extremely high.

Question 5

Total utility is maximized where:

Accepted Answer

A)  Price is less than marginal utility. 
B)  Price is equal to marginal utility. 
C)  Marginal utility is maximized. 
D)  Marginal utility is zero. 
A)  Price is less than marginal utility. 
B)  Price is equal to marginal utility. 
C)  Marginal utility is maximized. 
D)  Marginal utility is zero.

Question 6

Market demand is the:

Accepted Answer

A)  Sum of all individual demands for a product in a given time period. 
B)  Sum of all individual supply preferences. 
C)  Same thing as an individual's demand. 
D)  Satisfaction from consuming an additional unit of a gooD. 
A)  Sum of all individual demands for a product in a given time period. 
B)  Sum of all individual supply preferences. 
C)  Same thing as an individual's demand. 
D)  Satisfaction from consuming an additional unit of a gooD.

Question 7

A bar patron complains that he can no longer visit his neighborhood tavern as often because the price of his favorite beer went up a dollar a glass to $4.He used to purchase 20 beers per week but now he only purchases 16 beers per week.Determine if demand for beer is elastic or inelastic.If the patron only had 12 beers per week after the price increase would the elasticity of demand for the beer be different?

Accepted Answer

The price elasticity for the beer would

Question 8

Which of the following is the best reason why we typically pay a relatively low price for water?

Accepted Answer

A)  Additional units of water are normally not worth much to us. 
B)  Because water is abundant,the total utility we receive from water is relatively low. 
C)  Because water is abundant,the marginal utility we receive from water is relatively high. 
D)  Although additional units of water are normally worth a lot to us,the supply of water is so great we refuse to pay a high price for these additional units. 
A)  Additional units of water are normally not worth much to us. 
B)  Because water is abundant,the total utility we receive from water is relatively low. 
C)  Because water is abundant,the marginal utility we receive from water is relatively high. 
D)  Although additional units of water are normally worth a lot to us,the supply of water is so great we refuse to pay a high price for these additional units.

Question 9

Demand is defined as the:

Accepted Answer

A)  Desire for goods and services. 
B)  Ability and willingness to sell goods at various prices. 
C)  Ability and willingness to buy specific quantities of a good or service at various prices in a given time period,ceteris paribus. 
D)  Sensitivity of buyers to a change in price. 
A)  Desire for goods and services. 
B)  Ability and willingness to sell goods at various prices. 
C)  Ability and willingness to buy specific quantities of a good or service at various prices in a given time period,ceteris paribus. 
D)  Sensitivity of buyers to a change in price.

Question 10

If the price elasticity of demand for a product is 2.3,this means that quantity demanded will increase by _______ for each _______ decrease in price,ceteris paribus.

Accepted Answer

A)  1 percent;2.3 percent 
B)  1 unit;$2.30 
C)  2.3 percent;1 percent 
D)  2. 
A)  1 percent;2.3 percent 
B)  1 unit;$2.30 
C)  2.3 percent;1 percent 
D)  2.

Question 11

Which of the following is a determinant of demand for a good?

Accepted Answer

A)  Consumer income. 
B)  The number of available workers. 
C)  Prices of factor inputs. 
D)  Technology. 
A)  Consumer income. 
B)  The number of available workers. 
C)  Prices of factor inputs. 
D)  Technology.

Question 12

Ceteris paribus,in which of the following instances will total revenue decline?

Accepted Answer

A)  Price rises and demand is inelastic. 
B)  Price rises and demand is elastic. 
C)  Price falls and demand is elastic. 
D)  Price falls and demand is unitary elastic. 
A)  Price rises and demand is inelastic. 
B)  Price rises and demand is elastic. 
C)  Price falls and demand is elastic. 
D)  Price falls and demand is unitary elastic.

Question 13

Ceteris paribus,when a firm increases the price of its product,total revenue will:

Accepted Answer

A)  Always increase because the firm will receive more revenue per unit sold. 
B)  Always decrease because the firm will sell fewer units. 
C)  Increase if the price elasticity of demand is inelastic. 
D)  Increase if the price elasticity of demand is elastic. 
A)  Always increase because the firm will receive more revenue per unit sold. 
B)  Always decrease because the firm will sell fewer units. 
C)  Increase if the price elasticity of demand is inelastic. 
D)  Increase if the price elasticity of demand is elastic.

Question 14

The largest portion of the average U.S.consumer's dollar is spent on:

Accepted Answer

A)  Food. 
B)  Entertainment. 
C)  Health care. 
D)  Housing. 
A)  Food. 
B)  Entertainment. 
C)  Health care. 
D)  Housing.

Question 15

The demand for _______ is relatively elastic.

Accepted Answer

A)  Water 
B)  Electricity 
C)  Vacation travel 
D)  Coffee 
A)  Water 
B)  Electricity 
C)  Vacation travel 
D)  Coffee

Question 16

The demand for such items as salt,sugar and hand soap tend to be:

Accepted Answer

A)  Relatively inelastic 
B)  Relatively elastic 
C)  Perfectly inelastic 
D)  Perfectly elastic 
A)  Relatively inelastic 
B)  Relatively elastic 
C)  Perfectly inelastic 
D)  Perfectly elastic

Question 17

The price elasticity of demand measures the response of consumers to a change in price.

Accepted Answer

A) True 
 B)False

Question 18

If demand is unitary elastic,then a price cut:

Accepted Answer

A)  Reduces total revenue. 
B)  Increases total revenue. 
C)  Does not change total revenue. 
D)  Sometimes increases and sometimes decreases total revenue. 
A)  Reduces total revenue. 
B)  Increases total revenue. 
C)  Does not change total revenue. 
D)  Sometimes increases and sometimes decreases total revenue.

Question 19

Which of the following does NOT influence consumer demand?

Accepted Answer

A)  The consumer's ability to pay. 
B)  The consumer's fears,psychological complexes,and anxieties. 
C)  Ego and status. 
D)  Producer behavior. 
A)  The consumer's ability to pay. 
B)  The consumer's fears,psychological complexes,and anxieties. 
C)  Ego and status. 
D)  Producer behavior.

Question 20

The law of demand and the law of diminishing marginal utility are related since both:

Accepted Answer

A)  Predict that consumers will continue to buy unlimited amounts of goods. 
B)  Address the budget constraints that consumers face. 
C)  Assume that the first units consumed have more utility than subsequent units. 
D)  Assert that consumer preferences are not as significant as price and income. 
A)  Predict that consumers will continue to buy unlimited amounts of goods. 
B)  Address the budget constraints that consumers face. 
C)  Assume that the first units consumed have more utility than subsequent units. 
D)  Assert that consumer preferences are not as significant as price and income.

If the price of battery-powered flashlights falls and the demand for flashlight batteries rises,then flashlights and batteries are:

Table 4.1 - Utility schedule Complete the table and then use the information to answer the question(s)below. -In Table 4.1,the total utility when two units are consumed is:

Status and ego concerns are sociopsychiatric explanations for consumption behavior.

Ceteris paribus,a price increase will cause total revenue to stay the same for a producer only if the price elasticity demand for its product is:

Total utility is maximized where:

Market demand is the:

Which of the following is the best reason why we typically pay a relatively low price for water?

Demand is defined as the:

If the price elasticity of demand for a product is 2.3,this means that quantity demanded will increase by _ for each _ decrease in price,ceteris paribus.

Which of the following is a determinant of demand for a good?

Ceteris paribus,in which of the following instances will total revenue decline?

Ceteris paribus,when a firm increases the price of its product,total revenue will:

The largest portion of the average U.S.consumer's dollar is spent on:

The demand for _______ is relatively elastic.

The demand for such items as salt,sugar and hand soap tend to be:

The price elasticity of demand measures the response of consumers to a change in price.

If demand is unitary elastic,then a price cut:

Which of the following does NOT influence consumer demand?

The law of demand and the law of diminishing marginal utility are related since both:

The Challenge of Economics

The US Economy

Supply and Demand

Supply Decisions

Competition

Monopoly

The Labor Market

Government Intervention

The Business Cycle

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

Theory and Reality

International Trade

Filters

Exam 4: Consumer Demand

If the price of battery-powered flashlights falls and the demand for flashlight batteries rises,then flashlights and batteries are:

Table 4.1 - Utility schedule Complete the table and then use the information to answer the question(s)below. -In Table 4.1,the total utility when two units are consumed is:

Status and ego concerns are sociopsychiatric explanations for consumption behavior.

Ceteris paribus,a price increase will cause total revenue to stay the same for a producer only if the price elasticity demand for its product is:

Total utility is maximized where:

Market demand is the:

Which of the following is the best reason why we typically pay a relatively low price for water?

Demand is defined as the:

If the price elasticity of demand for a product is 2.3,this means that quantity demanded will increase by _______ for each _______ decrease in price,ceteris paribus.

Which of the following is a determinant of demand for a good?

Ceteris paribus,in which of the following instances will total revenue decline?

Ceteris paribus,when a firm increases the price of its product,total revenue will:

The largest portion of the average U.S.consumer's dollar is spent on:

The demand for _______ is relatively elastic.

The demand for such items as salt,sugar and hand soap tend to be:

The price elasticity of demand measures the response of consumers to a change in price.

If demand is unitary elastic,then a price cut:

Which of the following does NOT influence consumer demand?

The law of demand and the law of diminishing marginal utility are related since both:

The Challenge of Economics

The US Economy

Supply and Demand

Supply Decisions

Competition

Monopoly

The Labor Market

Government Intervention

The Business Cycle

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

Theory and Reality

International Trade

Filters

If the price elasticity of demand for a product is 2.3,this means that quantity demanded will increase by _ for each _ decrease in price,ceteris paribus.